The American Recovery and Reinvestment Act of 2009, the “Recovery Act”, has allocated an unprecedented $7 Billion to broadband and has launched a new chapter of broadband policy in the US.

The coming months will inspire an accelerated debate and consideration of what this can, and should, mean, on many levels from tactical grant-making to broader economic policy. Already, the lead US government agencies have geared up public consultations and fast-track proceedings.

In the Recovery Act, Congress assigned grant and loanmaking responsibilities to the Department of Commerce’s National Telecommunications and Information Administration (NTIA) and the Department of Agriculture’s Rural Utilities Service (RUS). NTIA will administer the Broadband Technologies Opportunities Program (BTOP), which will provide grants for developing and expanding broadband services, and RUS will continue to administer its programs of broadband loans, loan guarantees, and grants with additional funds.

Congress has assigned a key consultative role to the Federal Communications Commission in defining the foundational terms of “broadband” and “unserved” and “underserved” areas and in establishing the non-discrimination and network interconnection obligations that will be contractual conditions of BTOP grants.

Although straightforward on its face, this proposition of a needed broadband recovery policy preference for royalty-free standards contains “what”, “why”, and “how” aspects.

Starting with the “what” aspect, this proposition contains four elements, each of which will merit a longer elaboration:

Policy – Of course, the Internet is based on royalty-free standards, originally funded by government research, so it may seem that a “policy” of preferring the lowest cost approach that enables a pro-competitive market dynamic is so obvious as to scarcely merit articulation. But unlike DARPA and the generation that inspired the Internet and Web revolutions, the FCC has favored royalty-bearing approaches, particularly in the pivotal broadband crossover enabler of digital television.

Policy Preference – the term “preference” may seem a soft concept, but standards gridlock is real, perhaps nowhere more so than in the challenge of sorting out royalty-bearing and royalty free (and ex post facto v. ex ante) standards processes — just putting all approaches in the same standards group fails to recognize the business models of standards thickets.

Royalty-Free – Not maybe royalty-free, not let’s hope royalty-free. Royalty free. It bears noting that the FCC, a regulatory body, was never the actual end customer of these DTV standards, in the same way that the military was of the original Internet work, so the self-interested incentive to prefer a lower cost or royalty free approach was perhaps not as immediate, so these distinctions might seem academic — but they are not to anyone paying the bills. Broadband recovery requires different thinking on this topic.

From rural broadband related initiatives like IPTV and telemedicine to open video on the Web, the need for royalty-free, uncaptured broadband standards is a pressing issue that needs consideration now, rather than later. Let’s not build another infrastructure on the sand of unknown ownership of the underlying technologies.

“The [Assistant Secretary at NTIA], in consultation with the Federal Communications Commission . . . shall establish a national broadband service deployment and expansion program . . . .”

§ 6001(b)(1):

“The purposes of the [BTOP] are to . . . provide access to broadband service to consumers residing in unserved areas of the United States.”)

Recovery Act § 6001(j):

“Concurrent with the issuance of the Request for Proposal for grant applications pursuant to this section, the Assistant Secretary shall, in coordination with the Commission, publish the non-discrimination and network interconnection obligations that shall be contractual conditions of grants awarded under this section, including, at a minimum, adherence to the principles contained in the Commission’s broadband policy statement (FCC 05-15[1], adopted August 5, 2005).”

Conf. Rep. 111-16, at 776:

“The [Recovery Act] does not define such terms as ‘unserved area’ ‘underserved areas’ and ‘broadband.’ The Conferees instruct the NTIA to coordinate its understanding of these terms with the FCC, so that the NTIA may benefit from the FCC’s considerable expertise in these matters.”)